![](\"https:\/\/taxwhatifdoctor.com\/wp-content\/uploads\/Blog-Pic-2023.03.21.png\" "\\"Understanding")
<\/a><\/div>Understanding Tax Credits<\/a><\/span>When planning ahead, or just engaging in their day to day operations, most business owners at least occasionally think about tax deductions. A business dinner that can be partially deductible, or a new machine that can be depreciated. However, they often don\u2019t think about or plan how to acquire other tax credits, which can often be much more valuable. Tax credits are often transitory, with the benefits increased or reduced from year to year, or sometimes eliminated altogether, only to be brought back again several years later. Over the last few decades we have seen some popular credits renewed or in some cases even made a permanent part of the tax code. Small business owners seem to often not be<\/p><\/div><\/li>
<\/a><\/div>Logical Tax Planning<\/a><\/span>It\u2019s hard to be logical all the time about everything. The most financially successful tax clients we serve at least attempt to force themselves to be logical, for their own benefit. For instance, our parents, as well as a subset of the economy including some popular radio show based advisors like Dave Ramsey, say you should pay off your home and have a \u201cfree and clear\u201d deed as a goal (they are wrong in most cases by the way).\u00a0That kind of thinking is emotional thinking, mixed perhaps with some presumptive attitude about what the general populous is capable of. \u201cWell, we know we can\u2019t get people to do what would really be best for them based on pure math and<\/p><\/div><\/li>
<\/a><\/div>Mistakes Can Go Both Ways!<\/a><\/span>Many times business owners have come into our office and with our help have found that they were doing things incorrectly regarding their bookkeeping and taxes. Occasionally, the errors add to the tax burdens that they have been under-reporting. That never feels good, but it is always better to fix those issues prior to any audit. Often, errors discovered \u201cpre-audit\u201d can be fixed by simply amending the return, and no IRS issues follow, and everyone just moves on. But quite often, the errors made were not in their own favor. In those case, we help them file amended returns that net them large additional refunds for up to three years back, and that always feels great! So, how do these<\/p><\/div><\/li>
<\/a><\/div>How to Avoid Capital Gains Taxes Still Seems to Mystify the Public<\/a><\/span>When people are contemplating selling an asset like a house, an investment property, stock or a business asset, it\u2019s usually to make a profit or to raise cash. Sometimes, a house is sold in order to buy bigger (or smaller), to move to a different town to take a new job. In the case of stocks, it might be for the taking of profits, stopping further loses, or again to raise cash.\u00a0 One common thread among all of these decisions is that people generally think about them for some time before they act, as usually these are among the largest assets they have. What we see often in the tax planning world is that people sell the asset, and then<\/p><\/div><\/li>
<\/a><\/div>Like It or Not, Taxes are Constantly Changing<\/a><\/span>Tax policy and rates have always been fluid, much more so than most people realize, as they only focus on it for short periods one time a year. You also don\u2019t see many high school or college classes on the history of taxes and tax planning, unless you\u2019re in accounting school. Like a distant relative you see at an occasional wedding, you forget most of the prior experiences and conversations and simply repeat them as an act of convenience. It\u2019s the lack of personal taxation understanding and the continuous ebbs and flows that allow the tax authorities to keep things the same just long enough to let people form habits, then change the tax rules to penalize the habits created.<\/p><\/div><\/li><\/ul> <\/div>